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Duopoly and Competition Policy - Apple and Google duopoly limits competition and choice

Geoff Riley

15th December 2021

Much interest today in a new report on Apple and Google duopolistic dominance of the smartphone market in the UK.

The Competition and Markets Authority (CMA) have argued in an interim report that Google and Apple's duopolistic dominance of the mobile phone industry in the UK risks damaging economic welfare and efficiency especially through limited choice and higher prices.

The Head of the CMA is quoted as saying "Apple and Google have developed a vice-like grip over how we use mobile phones and we're concerned that it's causing millions of people across the UK to lose out,"

Heavy market dominance of what the CMA terms the mobile phone eco-system is now firmly in the sights of the UK competition regulator who recently told Meta (Facebook) that they needed to sell (divest) the animate gif platform Giphy.

The CMA is concerned that Apple and Google have too much control over operating systems (iOS and Android), app stores (App Store and Play Store), and web browsers (Safari and Chrome) that together form their ‘ecosystems.

The CMA is also worried that people could be facing higher prices than they would in a more competitive market, including for Apple phones, app subscriptions and purchases made within apps.

This leads to a loss of consumer surplus and higher prices in real terms makes many of these products less affordable for people and families on lower incomes - which in turn risks deepening the digital divide.

The CMA's full findings are expected to be published in the early summer of 2022. The prominence of digital platforms is one of THE most important competition policy issues of the age and definitely one that students are encouraged to follow.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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